SAFE Banking Act will allow marijuana businesses to use banks, credit unions

by Bamidele Ogunberu Posted on March 9th, 2019

Washington: U.S. Rep. Ed Perlmutter has introduced bipartisan SAFE Banking Act to allow marijuana-related businesses access to the banking system. The bill which will allow cannabis companies to use banks and credit unions has nine Republican co-sponsors.

“The fears that we had, that this was a public safety matter, have come to pass,” Perlmutter said.

Some say their support is not an endorsement of marijuana but a realization that banking creates paper trails, improves public safety and maintains “the very pillars of liberty and freedom our country was founded on,” in the words of Ohio Rep. Warren Davidson, a member of the conservative/libertarian House Freedom Caucus.

Perlmutter has introduced similar legislation several times before and it has failed to pass the House and Senate. But the political calculus has changed with Democrats controlling the House.

Perlmutter spent years fighting to get even a hearing on marijuana banking in the House Financial Services Committee without success. After Democrats took control in January, one of the first hearings in Financial Services was on marijuana banking, a stark sign of the bill’s changing odds.

The bill had 106 co-sponsors when it was introduced Thursday and Perlmutter expects to add many more in the coming weeks. He is optimistic of the bill’s odds in committee, the House and Senate, where companion legislation has drawn support from some Republicans in past years. While it’s not known if President Donald Trump will back the bill, White House Chief of Staff Mick Mulvaney sponsored the bill when he was in Congress.

“I think they’re good,” Perlmutter said when asked about the bill’s chances, “but we have a lot of work to do.”

Because marijuana remains illegal under federal law, financial institutions risk criminal prosecution if they hold the profits of marijuana sales. That forces cannabis companies to operate primarily with cash, making them vulnerable to robberies and more prone to white-collar crimes.

“There are a few banks and credit unions that will do business with us, but for the most part the regionals and the nationals, like Wells Fargo, will not touch us,” said Bruce Nassau, board chairman at Marijuana Industry Group and a co-owner of Denver-area cannabis companies.

“Two things the bad guys love are cash and cannabis. So, we’re kind of a sitting duck,” he added.

Anti-marijuana groups oppose Perlmutter’s bill because banking bolsters the cannabis industry.

Marijuana banking proposal gets first-ever hearing in U.S. House committee.

Kevin Sabet, a former drug policy adviser to President Barack Obama and founder of Smart Approaches to Marijuana, called cannabis companies “money hungry.”

“The marijuana industry has spent massive amounts of money to lobby Congress into granting access to the federal banking system, which would open the floodgates on Wall Street investment. So far, it has been in vain, but we will remain vigilant in stopping Big Marijuana,” Sabet said.

Nassau is more optimistic about this Perlmutter bill than he’s been with past bills. The legislation would grant cannabis companies legitimacy and treat them as all other companies are treated, he said. It would assuage the fears he has for his employees, customers and the general public.

“This is, potentially, a real game-changer for us,” he said.

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Bamidele Ogunberu

Bamidele Ogunberu

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